• This website sets cookies on your device. To find out more about how we use cookies please refer to our Privacy and Cookie Policy. By continuing to use the site, we’ll assume that you are content for us to set these on your device.
  • Close
Home > Markets > Sterling Monetary Framework
 

Sterling Monetary Framework

The Bank's operations in the sterling money markets have two objectives, stemming from its monetary policy and financial stability responsibilities - to implement the Monetary Policy Committee's decisions in order to meet the inflation target; and to reduce the cost of disruption to the liquidity and payment services supplied by banks to the UK economy. These facilities are set out in part 2 of the 'Red Book':

Part 2 - The operations currently used in the Sterling Monetary Framework (318KB)

When Bank Rate was reduced close to zero in March 2009, the MPC's instrument of monetary policy shifted towards the quantity of money provided rather than the price at which the Bank lends or borrows money. This resulted in a number of changes to the Sterling Monetary Framework (SMF) detailed in the document below:

Market Notice: Sterling Monetary Framework (16KB)
Effective 6 August 2009

The table in the document below summarises the operations currently undertaken by the Bank, including some of the operational parameters:

Summary of current Bank of England's operations in the sterling money markets (176KB)

Latest information

Developments in the Bank's approach to liquidity insurance (136KB)
Latest SMF Operational Announcements
Number of SMF participants